Certainly that’s still the case with terrestrial radio – where NPR, as a nonprofit, adheres to FCC regulations that allow for the identification of corporate sponsors but not the promotion of their products.

But the less-restrictive digital environment and the consistent growth of podcasting has given NPR a new revenue stream. The organization got into podcasting more than a decade ago and its monthly listeners totaled 7.2 million in April. Its podcasting revenue has doubled in the past year and grown 10 times over the past three years.

AdExchanger spoke with two execs from National Public Media (NPM), the sponsorship arm of NPR and PBS: General Manager Bryan Moffett and President and CEO Gina Garrubbo.

AdExchanger: You mentioned there’s little duplication between your broadcast vs. podcast audiences. How would you describe the two?

BRYAN MOFFETT: As you go from radio to digital, then to newer digital formats, the audience gets younger. The podcasting audience is younger than our radio audience. But if you look at affluence and household income, it’s pretty similar.

Podcasting isn’t exactly new and you mentioned you’ve been involved in it for nearly a decade. How has its audience evolved?

BM: “Serial” put it on the map in the public mind space, but there wasn’t a massive spike in our audience just because of it. The traffic and audience has been growing year over year. We’re at the precipice of on-demand audio being adapted in a big way by the public because platforms like Google, Spotify and Pandora are interested in getting this type of content in front of their users.

Is the growth of streaming opening up new ways of doing advertising? Like dynamic ad insertion is now possible.

BM: We’ve actually been doing [pre-roll] dynamic insertion for eight years now. It’s a very different technology and there are only a couple of vendors that specialize in it, so it’s challenging because it’s unlike everything else. It happens outside of a browser, there are no cookies.

The thing that’s starting to catch on is the dynamic insertion of mid-rolls. Some players do it now. We don’t yet. We still produce them into the show. But that’s the thing that’s going to change, and that opens up a big opportunity to monetize the back catalog.

GINA GARRUBBO: One thing about mid-roll – and we don’t dynamically serve it yet – all of our research has said our audience doesn’t find the commercial messaging at all intrusive. There’s a positive rub-off on the sponsors who support the podcasts.

Why is mid-roll just happening now on NPR?

BM: The biggest challenge is, in technical terms, the file literally has to be split in two at the point where you want the mid-roll to go. You need to have some silence produced in there or the transition can be jarring. And that would be unacceptable to users. So the technology has existed, but you need to mix it with the production processes.

Does NPM work with agencies or brands?

GG: We work with brands and all the big agencies. These are the same agencies we’ve been selling broadcast audio messages to for years, but what’s different is in some cases, it’s a digital unit buying them. Horizon has an audio unit, so it doesn’t matter if it’s broadcast or digital. Who buys it can be very different depending on the organization and the brands.

BM: We’re part of a committee with a bunch of other podcasters working on standards, counting audience and counting ad impressions. Once you get those pieces together, it’ll be a more mature medium for media buyers.

When do you envision full maturity of audience measurement?

BM: We’re in it right now. This year, NPR and a bunch of podcast producers got a standard for counting audience and downloads. Most of those groups are on the IAB committee. This is the year where it all comes together. We have gotten a lot of Fortune 100 sponsors putting in insertion orders this year.

When you talk about distribution of podcasts over third-party platforms like Spotify, how does the ad rev share work?

BM: I can only speak in terms of the deals we’ve worked on, and our podcasts aren’t on Spotify yet. But in general, we always ask the distributor to pull the files from our servers, so we can see the traffic and count our audience. Since mid-rolls are produced into the show, it’s a simple mathematical calculation.

Some of the bigger platforms don’t want to operate that way. They want to take the files and distribute it themselves. That’s OK, too, as long as we get detailed metrics on the audience. Some publishers are happy to let third parties sell against them. But we sell our own inventory 100% direct. We don’t want others selling ads around NPR content.

GG: Even though digital is not FCC regulated, we have a somewhat muted approach, which our audience is used to and expects from us. We don’t allow a hard sell. So it’d be difficult to have a third party sell inventory, if they don’t understand our voice and what our audience is used to.

Will automated buys ever happen?

BM: We have some self-serve portals for digital, where our reps and agencies can deal. We have various exchanges we participate in. But we have very strict limits in what you can say in the creative, so we don’t get a lot of activity in those channels. It’s a lot easier to have a direct conversation with a sponsor who’s already bought in to all the benefits of reaching our audiences. They will change the messaging to be more effective for us. In programmatic, things happen so fast, that’s hard to do.

Do you allow targeting against first-party data? Is that feasible?

BM: It’s actually not. There are no cookies in this space, which is one of the biggest challenges. We’ve spent the last couple of years talking to DSPs to see if anyone can crack this problem. We do offer third-party tracking of the insertion of the pre-roll – like a third-party tracker from an agency will tell them a pre-roll has been successfully inserted into the download request.

We can do a lot of brand awareness and recall and intent-to-purchase for sponsors, but it’s survey-based.

How about grabbing a device ID or probabilistic matching?

BM: There’s a creepiness to that we have to stay away from. We’ve spoken to a lot of DSPs because you’d think, in theory, we have a big website and we could parse the logs and match some of the IP addresses to get a sense of the cross-over. But nobody has wanted to take it on yet, so we charge ahead and rely on our survey data.

What are the DSP capabilities around audio? Are they where they need to be to handle audio ads?

BM: I don’t think so. There’s a format called DAST which is similar to VAST for video. It’s been fairly broadly adopted for streaming audio. But for podcasts it’s not that helpful. As the medium evolves to a model where you’re always connected and it acts more like web-based audio, these tools will start to make more sense. But right now, still half or more of the audience is happening in podcasting apps.

Do you get a lot of visibility from major podcast downloading portals like iTunes?

BM: People have a good time beating up on Apple as the big hold-back, but they provide good information to publishers. They just don’t provide it in a way that’s transparent.

What sort of transparency are you looking for?

BM: We get number of subscribers, some demographic information – non-PII, of course – but we don’t get full transparency to publishers across the breadth of episodes, like average listening time.